Intrinsic value of Air Transport Services Group - ATSG

Previous Close

$24.52

  Intrinsic Value

$22.51

stock screener

  Rating & Target

hold

-8%

  Value-price divergence*

-113%

Previous close

$24.52

 
Intrinsic value

$22.51

 
Up/down potential

-8%

 
Rating

hold

 
Value-price divergence*

-113%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of ATSG stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  24.23
  42.90
  39.11
  35.70
  32.63
  29.87
  27.38
  25.14
  23.13
  21.31
  19.68
  18.21
  16.89
  15.70
  14.63
  13.67
  12.80
  12.02
  11.32
  10.69
  10.12
  9.61
  9.15
  8.73
  8.36
  8.02
  7.72
  7.45
  7.20
  6.98
  6.79
Revenue, $m
  769
  1,099
  1,529
  2,074
  2,751
  3,573
  4,551
  5,695
  7,013
  8,507
  10,182
  12,037
  14,070
  16,280
  18,662
  21,213
  23,929
  26,806
  29,841
  33,030
  36,373
  39,867
  43,514
  47,314
  51,269
  55,382
  59,658
  64,102
  68,719
  73,518
  78,507
Variable operating expenses, $m
 
  968
  1,345
  1,823
  2,417
  3,138
  3,996
  5,000
  6,155
  7,466
  8,935
  10,558
  12,342
  14,280
  16,370
  18,608
  20,990
  23,514
  26,176
  28,974
  31,906
  34,971
  38,170
  41,503
  44,972
  48,580
  52,331
  56,229
  60,280
  64,490
  68,865
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  705
  968
  1,345
  1,823
  2,417
  3,138
  3,996
  5,000
  6,155
  7,466
  8,935
  10,558
  12,342
  14,280
  16,370
  18,608
  20,990
  23,514
  26,176
  28,974
  31,906
  34,971
  38,170
  41,503
  44,972
  48,580
  52,331
  56,229
  60,280
  64,490
  68,865
Operating income, $m
  64
  131
  184
  251
  334
  435
  555
  696
  858
  1,041
  1,247
  1,478
  1,728
  1,999
  2,292
  2,605
  2,939
  3,292
  3,665
  4,056
  4,467
  4,896
  5,344
  5,811
  6,296
  6,802
  7,327
  7,872
  8,440
  9,029
  9,642
EBITDA, $m
  204
  328
  456
  619
  821
  1,066
  1,357
  1,699
  2,091
  2,537
  3,037
  3,590
  4,196
  4,855
  5,566
  6,327
  7,137
  7,995
  8,900
  9,851
  10,848
  11,890
  12,978
  14,111
  15,290
  16,517
  17,792
  19,118
  20,495
  21,926
  23,414
Interest expense (income), $m
  11
  19
  32
  50
  73
  101
  135
  175
  223
  277
  339
  409
  486
  570
  661
  760
  866
  978
  1,098
  1,224
  1,356
  1,494
  1,639
  1,790
  1,948
  2,112
  2,282
  2,459
  2,643
  2,835
  3,034
Earnings before tax, $m
  34
  113
  152
  201
  261
  334
  420
  520
  635
  764
  907
  1,069
  1,242
  1,429
  1,630
  1,845
  2,073
  2,314
  2,567
  2,833
  3,111
  3,402
  3,705
  4,020
  4,349
  4,690
  5,045
  5,413
  5,796
  6,194
  6,608
Tax expense, $m
  13
  30
  41
  54
  71
  90
  114
  141
  171
  206
  245
  289
  335
  386
  440
  498
  560
  625
  693
  765
  840
  919
  1,000
  1,086
  1,174
  1,266
  1,362
  1,462
  1,565
  1,672
  1,784
Net income, $m
  23
  82
  111
  147
  191
  244
  307
  380
  463
  558
  662
  781
  907
  1,043
  1,190
  1,347
  1,513
  1,689
  1,874
  2,068
  2,271
  2,483
  2,705
  2,935
  3,175
  3,424
  3,683
  3,952
  4,231
  4,522
  4,824

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  16
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,259
  1,775
  2,470
  3,351
  4,445
  5,772
  7,353
  9,201
  11,329
  13,744
  16,449
  19,445
  22,730
  26,300
  30,148
  34,270
  38,657
  43,305
  48,208
  53,360
  58,760
  64,406
  70,297
  76,436
  82,825
  89,470
  96,378
  103,557
  111,017
  118,770
  126,828
Adjusted assets (=assets-cash), $m
  1,243
  1,775
  2,470
  3,351
  4,445
  5,772
  7,353
  9,201
  11,329
  13,744
  16,449
  19,445
  22,730
  26,300
  30,148
  34,270
  38,657
  43,305
  48,208
  53,360
  58,760
  64,406
  70,297
  76,436
  82,825
  89,470
  96,378
  103,557
  111,017
  118,770
  126,828
Revenue / Adjusted assets
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
Average production assets, $m
  945
  1,349
  1,877
  2,547
  3,379
  4,388
  5,589
  6,994
  8,612
  10,447
  12,503
  14,781
  17,278
  19,991
  22,917
  26,050
  29,385
  32,918
  36,644
  40,561
  44,666
  48,957
  53,435
  58,101
  62,958
  68,009
  73,260
  78,717
  84,387
  90,281
  96,406
Working capital, $m
  -23
  -14
  -20
  -27
  -36
  -46
  -59
  -74
  -91
  -111
  -132
  -156
  -183
  -212
  -243
  -276
  -311
  -348
  -388
  -429
  -473
  -518
  -566
  -615
  -666
  -720
  -776
  -833
  -893
  -956
  -1,021
Total debt, $m
  548
  922
  1,431
  2,077
  2,879
  3,852
  5,010
  6,365
  7,925
  9,695
  11,678
  13,874
  16,282
  18,899
  21,720
  24,741
  27,957
  31,364
  34,957
  38,734
  42,692
  46,830
  51,149
  55,648
  60,332
  65,202
  70,266
  75,528
  80,996
  86,679
  92,586
Total liabilities, $m
  927
  1,301
  1,810
  2,456
  3,258
  4,231
  5,389
  6,744
  8,304
  10,074
  12,057
  14,253
  16,661
  19,278
  22,099
  25,120
  28,336
  31,743
  35,336
  39,113
  43,071
  47,209
  51,528
  56,027
  60,711
  65,581
  70,645
  75,907
  81,375
  87,058
  92,965
Total equity, $m
  332
  474
  659
  895
  1,187
  1,541
  1,963
  2,457
  3,025
  3,670
  4,392
  5,192
  6,069
  7,022
  8,050
  9,150
  10,322
  11,562
  12,871
  14,247
  15,689
  17,196
  18,769
  20,408
  22,114
  23,888
  25,733
  27,650
  29,641
  31,712
  33,863
Total liabilities and equity, $m
  1,259
  1,775
  2,469
  3,351
  4,445
  5,772
  7,352
  9,201
  11,329
  13,744
  16,449
  19,445
  22,730
  26,300
  30,149
  34,270
  38,658
  43,305
  48,207
  53,360
  58,760
  64,405
  70,297
  76,435
  82,825
  89,469
  96,378
  103,557
  111,016
  118,770
  126,828
Debt-to-equity ratio
  1.651
  1.950
  2.170
  2.320
  2.430
  2.500
  2.550
  2.590
  2.620
  2.640
  2.660
  2.670
  2.680
  2.690
  2.700
  2.700
  2.710
  2.710
  2.720
  2.720
  2.720
  2.720
  2.730
  2.730
  2.730
  2.730
  2.730
  2.730
  2.730
  2.730
  2.730
Adjusted equity ratio
  0.254
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267
  0.267

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  23
  82
  111
  147
  191
  244
  307
  380
  463
  558
  662
  781
  907
  1,043
  1,190
  1,347
  1,513
  1,689
  1,874
  2,068
  2,271
  2,483
  2,705
  2,935
  3,175
  3,424
  3,683
  3,952
  4,231
  4,522
  4,824
Depreciation, amort., depletion, $m
  140
  196
  272
  368
  486
  630
  802
  1,003
  1,234
  1,496
  1,790
  2,112
  2,468
  2,856
  3,274
  3,721
  4,198
  4,703
  5,235
  5,794
  6,381
  6,994
  7,634
  8,300
  8,994
  9,716
  10,466
  11,245
  12,055
  12,897
  13,772
Funds from operations, $m
  176
  279
  383
  514
  677
  875
  1,109
  1,383
  1,697
  2,054
  2,452
  2,892
  3,375
  3,899
  4,464
  5,068
  5,711
  6,391
  7,109
  7,862
  8,652
  9,477
  10,338
  11,235
  12,169
  13,139
  14,148
  15,197
  16,286
  17,419
  18,596
Change in working capital, $m
  -17
  -4
  -6
  -7
  -9
  -11
  -13
  -15
  -17
  -19
  -22
  -24
  -26
  -29
  -31
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -56
  -58
  -60
  -62
  -65
Cash from operations, $m
  193
  283
  388
  521
  686
  885
  1,122
  1,398
  1,714
  2,073
  2,474
  2,916
  3,402
  3,928
  4,495
  5,101
  5,746
  6,429
  7,148
  7,904
  8,695
  9,523
  10,386
  11,284
  12,220
  13,193
  14,204
  15,255
  16,346
  17,481
  18,661
Maintenance CAPEX, $m
  0
  -135
  -193
  -268
  -364
  -483
  -627
  -798
  -999
  -1,230
  -1,492
  -1,786
  -2,112
  -2,468
  -2,856
  -3,274
  -3,721
  -4,198
  -4,703
  -5,235
  -5,794
  -6,381
  -6,994
  -7,634
  -8,300
  -8,994
  -9,716
  -10,466
  -11,245
  -12,055
  -12,897
New CAPEX, $m
  -264
  -405
  -528
  -670
  -831
  -1,009
  -1,201
  -1,405
  -1,618
  -1,836
  -2,056
  -2,277
  -2,497
  -2,713
  -2,925
  -3,133
  -3,335
  -3,533
  -3,726
  -3,917
  -4,105
  -4,291
  -4,478
  -4,666
  -4,857
  -5,051
  -5,251
  -5,457
  -5,671
  -5,893
  -6,126
Cash from investing activities, $m
  -269
  -540
  -721
  -938
  -1,195
  -1,492
  -1,828
  -2,203
  -2,617
  -3,066
  -3,548
  -4,063
  -4,609
  -5,181
  -5,781
  -6,407
  -7,056
  -7,731
  -8,429
  -9,152
  -9,899
  -10,672
  -11,472
  -12,300
  -13,157
  -14,045
  -14,967
  -15,923
  -16,916
  -17,948
  -19,023
Free cash flow, $m
  -76
  -257
  -332
  -417
  -509
  -606
  -706
  -806
  -902
  -993
  -1,075
  -1,147
  -1,207
  -1,254
  -1,286
  -1,305
  -1,310
  -1,302
  -1,281
  -1,248
  -1,204
  -1,149
  -1,086
  -1,015
  -937
  -852
  -763
  -668
  -569
  -467
  -362
Issuance/(repayment) of debt, $m
  141
  390
  509
  646
  802
  973
  1,158
  1,355
  1,560
  1,770
  1,983
  2,196
  2,408
  2,616
  2,821
  3,021
  3,216
  3,407
  3,593
  3,777
  3,958
  4,138
  4,318
  4,500
  4,683
  4,871
  5,063
  5,262
  5,468
  5,683
  5,907
Issuance/(repurchase) of shares, $m
  -64
  60
  75
  89
  101
  110
  115
  114
  105
  87
  60
  19
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  75
  450
  584
  735
  903
  1,083
  1,273
  1,469
  1,665
  1,857
  2,043
  2,215
  2,408
  2,616
  2,821
  3,021
  3,216
  3,407
  3,593
  3,777
  3,958
  4,138
  4,318
  4,500
  4,683
  4,871
  5,063
  5,262
  5,468
  5,683
  5,907
Total cash flow (excl. dividends), $m
  -1
  193
  251
  318
  394
  477
  567
  663
  762
  865
  968
  1,068
  1,201
  1,363
  1,535
  1,716
  1,906
  2,105
  2,313
  2,529
  2,755
  2,989
  3,232
  3,484
  3,746
  4,018
  4,301
  4,594
  4,899
  5,216
  5,545
Retained Cash Flow (-), $m
  32
  -142
  -185
  -235
  -292
  -354
  -422
  -494
  -568
  -645
  -722
  -800
  -877
  -953
  -1,028
  -1,100
  -1,172
  -1,241
  -1,309
  -1,376
  -1,442
  -1,507
  -1,573
  -1,639
  -1,706
  -1,774
  -1,844
  -1,917
  -1,992
  -2,070
  -2,152
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  51
  66
  83
  102
  123
  145
  169
  194
  220
  246
  268
  324
  410
  507
  615
  734
  864
  1,004
  1,153
  1,313
  1,481
  1,659
  1,845
  2,040
  2,244
  2,456
  2,677
  2,907
  3,146
  3,393
Discount rate, %
 
  7.30
  7.67
  8.05
  8.45
  8.87
  9.32
  9.78
  10.27
  10.79
  11.32
  11.89
  12.49
  13.11
  13.77
  14.45
  15.18
  15.93
  16.73
  17.57
  18.45
  19.37
  20.34
  21.35
  22.42
  23.54
  24.72
  25.96
  27.25
  28.62
  30.05
PV of cash for distribution, $m
 
  48
  57
  65
  73
  80
  85
  88
  89
  87
  84
  78
  79
  83
  83
  81
  77
  70
  62
  53
  44
  36
  28
  22
  16
  11
  8
  5
  3
  2
  1
Current shareholders' claim on cash, %
  100
  96.1
  92.7
  90.0
  87.7
  85.9
  84.5
  83.4
  82.6
  82.0
  81.7
  81.7
  81.7
  81.7
  81.7
  81.7
  81.7
  81.7
  81.7
  81.7
  81.7
  81.7
  81.7
  81.7
  81.7
  81.7
  81.7
  81.7
  81.7
  81.7
  81.7

Air Transport Services Group, Inc. (ATSG) is a holding company. The Company provides airline operations, aircraft leases, aircraft maintenance and other support services primarily to the cargo transportation and package delivery industries. It offers aircraft, crew, maintenance and insurance (ACMI) for specified cargo operations. Its segments include ACMI Services and CAM. Through its subsidiaries, it offers a range of complementary services to delivery companies, freight forwarders, airlines and government customers. Its leasing subsidiary, Cargo Aircraft Management, Inc. (CAM) leases cargo aircraft to its airlines, as well as to non-affiliated airlines and other lessees. Airborne Global Solutions, Inc. (AGS) is its subsidiary that assists the Company's businesses in marketing plans and provides sales leads to its subsidiaries by identifying customers' business and operational requirements. It owns two airlines, ABX Air, Inc. (ABX) and Air Transport International, Inc. (ATI).

FINANCIAL RATIOS  of  Air Transport Services Group (ATSG)

Valuation Ratios
P/E Ratio 63.4
Price to Sales 1.9
Price to Book 4.4
Price to Tangible Book
Price to Cash Flow 7.6
Price to Free Cash Flow -20.5
Growth Rates
Sales Growth Rate 24.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 66%
Cap. Spend. - 3 Yr. Gr. Rate 18.5%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 156.3%
Total Debt to Equity 165.1%
Interest Coverage 4
Management Effectiveness
Return On Assets 2.6%
Ret/ On Assets - 3 Yr. Avg. 3.7%
Return On Total Capital 2.9%
Ret/ On T. Cap. - 3 Yr. Avg. 4.4%
Return On Equity 6.6%
Return On Equity - 3 Yr. Avg. 8.8%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 56.8%
Gross Margin - 3 Yr. Avg. 59.4%
EBITDA Margin 24.1%
EBITDA Margin - 3 Yr. Avg. 28.6%
Operating Margin 8.3%
Oper. Margin - 3 Yr. Avg. 10.4%
Pre-Tax Margin 4.4%
Pre-Tax Margin - 3 Yr. Avg. 7.8%
Net Profit Margin 3%
Net Profit Margin - 3 Yr. Avg. 4.9%
Effective Tax Rate 38.2%
Eff/ Tax Rate - 3 Yr. Avg. 38.3%
Payout Ratio 0%

ATSG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ATSG stock intrinsic value calculation we used $769 million for the last fiscal year's total revenue generated by Air Transport Services Group. The default revenue input number comes from 2016 income statement of Air Transport Services Group. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ATSG stock valuation model: a) initial revenue growth rate of 42.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7.3%, whose default value for ATSG is calculated based on our internal credit rating of Air Transport Services Group, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Air Transport Services Group.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ATSG stock the variable cost ratio is equal to 88.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for ATSG stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Air Transport Services Group.

Corporate tax rate of 27% is the nominal tax rate for Air Transport Services Group. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ATSG stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ATSG are equal to 122.8%.

Life of production assets of 7 years is the average useful life of capital assets used in Air Transport Services Group operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ATSG is equal to -1.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $332 million for Air Transport Services Group - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 59.518 million for Air Transport Services Group is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Air Transport Services Group at the current share price and the inputted number of shares is $1.5 billion.

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COMPANY NEWS

▶ Here are the top 10 Cincinnati stocks so far this year: SLIDESHOW   [Oct-10-17 04:56PM  American City Business Journals]
▶ New Strong Sell Stocks for October 6th   [Oct-06-17 09:17AM  Zacks]
▶ ATSG Elects Ray Johns to Board of Directors   [Oct-05-17 04:43PM  Business Wire]
▶ This week in N.Y.C. funding news: Bodega, Genvid, EEVO, Call9   [Sep-15-17 03:21PM  American City Business Journals]
▶ Corrado Elected Chief Operating Officer of ATSG   [Sep-11-17 04:05PM  Business Wire]
▶ Air Transport Services reports 2Q loss   [Aug-07-17 10:56PM  Associated Press]
▶ ATSG to Host Second Quarter 2017 Conference Call   [Jul-28-17 09:15AM  Business Wire]
▶ Amazon Prime Air pilots protest   [03:51PM  American City Business Journals]
▶ ATSG Holds Annual Meeting of Shareholders   [11:45AM  Business Wire]
▶ Air Transport Services beats Street 1Q forecasts   [May-03-17 07:17PM  Associated Press]
▶ ATSG to Host First Quarter 2017 Conference Call   [Apr-28-17 02:30PM  Business Wire]
▶ Post Earnings Coverage as FedEx Revenue Jumped 18%   [Mar-30-17 08:15AM  Accesswire]
▶ Amazon's air force is hiring to fill aerospace jobs in Seattle   [Mar-15-17 06:15PM  at bizjournals.com]
▶ Amazon's air force is hiring to fill aerospace jobs in Seattle   [06:15PM  American City Business Journals]
▶ New Strong Sell Stocks for March 10th   [Mar-10-17 08:50AM  Zacks]
▶ Air Transport Services misses 4Q profit forecasts   [Mar-06-17 04:52PM  Associated Press]
▶ ATSG to Host Fourth Quarter 2016 Conference Call   [Mar-02-17 01:42PM  Business Wire]
▶ After Amazon heads to Cincinnati, Wilmington site to lay off 335   [Feb-28-17 09:15AM  at bizjournals.com]
▶ Here's how Amazon's departure impacts Wilmington Air Park (Video)   [Feb-08-17 11:27AM  at bizjournals.com]
▶ Amazon to create $1.5B air hub at CVG   [Feb-01-17 01:59PM  at bizjournals.com]
▶ Amazon plans to invest $1.4B to move its cargo jet fleet hub   [Jan-31-17 05:12PM  at bizjournals.com]
▶ ATSG Issues Preliminary Outlook for 2016 Results   [Jan-26-17 04:51PM  Business Wire]
▶ Today's Top Supply Chain and Logistics News From WSJ   [Jan-04-17 06:42AM  at The Wall Street Journal]
▶ [$$] Amazon Air-Cargo Operator Buys Repair Shop   [Jan-03-17 09:58PM  at The Wall Street Journal]
▶ [$$] Amazon Air-Cargo Operator Buys Repair Shop   [03:53PM  at The Wall Street Journal]
▶ Cincinnati airline makes acquisition   [12:25PM  at bizjournals.com]
Financial statements of ATSG
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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